It’s a tale of two tech companies this morning, as Microsoft announces a monster cash return to shareholders … and Apple is hit by fears of weak demand for its new iPhone 16. Microsoft surprised Wall Street last night by unveiling a new $60bn (£45bn) stock-buyback programme – a way of returning excess cash to investors – and raising its quarterly dividend by 10%. The plan matches Microsoft’s largest ever share buyback plan, according to Bloomberg. The scale of the move was unexpected, as Microsoft has been ramping up its investment to support artificial intelligence. The company had also disappointed shareholders at the end of July when it reported a slight slowdown in growth at its Azure cloud computing arm. Its net income in the last year rose 22%, to $88bn, leaving it with over $75bn of cash on its books. Microsoft is currently the world’s second largest company, worth around $3.2tn, behind Apple (at $3.3tn). That gap narrowed yesterday, as Apple’s shares fell by 2.8% following analyst report that demand for the iPhone 16 was weaker than hoped. Early pre-order data from BofA Global Research revealed shorter global shipping times for the iPhone 16 Pro models compared with last year’s 15 Pro models, in the first three days of pre-order sales. TF International Securities’ analyst Ming-Chi Kuo calculated that pre-order sales for the iPhone 16 are around 12.7% lower than for last year’s iPhone 15. Having analysed data on pre-order sales, delivery times and shipments, Kuo explained in a post on Medium: "The key factor is the lower-than-expected demand for the iPhone 16 Pro series." However, not every analyst was concerned by the lack of meaningful growth in iPhone pre-orders. DA Davidson analyst Gil Luria points out that the phone’s AI features are being rolled out gradually "... which means the upgrade cycle will likely materialise over the next 12-18 months”. The agenda • 10am BST: ZEW index of German economic confidence • 1.30pm BST: US retail sales for August • 2.15pm BST: US industrial production for August • 3pm BST: NAHB index of US housing market We’ll be tracking all the main events throughout the day ...
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